The Financial Services Commission uncovered 90,000 violations of the Act on Reporting and Using Specified Financial Transaction Information by virtual asset exchange Coinone, imposed a three-month partial business suspension, and levied fines of 5.2 billion won.
The Financial Services Commission (FSC) Financial Intelligence Unit (FIU) on the 13th stated accordingly, saying it comprehensively considered the degree and pattern of the violations, the motive, and the consequences. It issued a reprimand warning to Coinone CEO Cha Myung-hoon.
Due to the partial business suspension, from Apr. 29 this year to July 28 of the same year, Coinone may provide only external virtual asset transfer (deposit/withdrawal) services to new customers. Existing customers can trade and exchange virtual assets and deposit and withdraw won without restriction.
According to the FIU, Coinone supported 10,113 virtual asset transfer transactions to 16 overseas unregistered virtual asset service providers. The FIU noted that despite continuously requesting measures to suspend transactions with overseas unregistered virtual asset service providers and communicating the need to comply with the law, Coinone did not fulfill its duty of care to comply with legal obligations.
Coinone was also found to have violated the customer due diligence obligation under the Act on Reporting and Using Specified Financial Transaction Information in about 40,000 cases. It marked customer verification as complete even when some information was masked and identity information could not be confirmed, or allowed transactions by high-risk customers with elevated money laundering concerns without verification.
The FIU determined that Coinone violated 30,000 cases of the transaction restriction obligation by not restricting transactions by customers whose customer verification measures had not been completed.
Regarding whether it will file an administrative lawsuit, Coinone said it plans to carefully review the matter through its board of directors while keeping various possibilities in mind.